Dyson's Incremental Innovation Journey

Introduction

Innovation is an essential aspect of business operations. It is imperative for companies; especially the ones operating in a highly competitive market, to innovate and either bring new products to the market or develop and improve on the existing product (Lopez-Vega & Tell, 2016). This way, firms can cater to the demands of the customers, thereby ensuring that their varied needs and demands are fulfilled to the greatest possible extent. Considering its overall importance for businesses, several theories and concepts have been developed over the years (Hazarika & Zhang, 2019). By using these theories, companies can innovate to improve their overall performance by providing maximum satisfaction to the customers.

Some of the theories of innovation are incremental innovation, disruptive innovation, architectural innovation and radical innovation. In this report innovation journey of Dyson, which is a UK based technology company, has been discussed. The company is renowned for designing and manufacturing household appliances like vacuum cleaners, hand dryers, heaters, bladeless fans, hairdryers, etc. The company, in particular, is known for its vacuum cleaners (King & Baatartogtokh, 2015). Sir James Dyson, the founder of the firm, is known for using the Incremental Innovation theory, which is not only a commonly used form of innovation, but it uses the existing technology and improves on it to increase value to the customers.

INNOVATION THEORY

Principles and Processes of the Incremental Innovation Theory

Incremental innovation is defined as the process of making certain, even small improvements in existing products, services, processes and methods or even in the organisation itself (Nambisan & Lyytinen, 2017). The key to the incremental innovation theory is to make small changes to the existing products and/or services, but not disruptive or significant changes. This way aim of the innovator is on improving the overall quality and value of the product and/or service so that the demands of the customers can be satisfied in a better manner. Here, the key is that the change must create value and also must possess an element or feature of novelty. According to Wu & Wang (2016), it is imperative for companies, regardless of their industry of operations, to do at least some type of incremental innovation.

As compared to radical or disruptive innovation, incremental innovation does not entail making significant changes or improvements, and therefore it does not have a very significant impact on the market and its dynamics. While radical or disruptive innovation is time-consuming, incremental innovation is much quicker and therefore, easier to implement as well. Furthermore, there is far less uncertainty in incremental innovation (Hinings & Gegenhuber, 2018). Due to this reason, incremental innovation is more predictable in nature and therefore, much safer for companies to use and work on as well. Some experts believe incremental innovation is not very effective and has a 'bad reputation' among several innovators. However, Saldanha (2017) argues that many believe that only one incremental innovation would give them the desired results. However, this is not the case because incremental innovation is a long-term process, and therefore only one incremental innovation is not enough.

Huggins & Thompson (2015) associated incremental innovation with compound interest. This means the effects of incremental innovation stack up over the long term, and therefore they are best reaped only after a certain time. This can make a significant difference in performance over time. In this regard, the faster an organisation can innovate over time, even if they are small innovations, the more significant the difference the company will be able to make in the market.

In the application and use of incremental innovation, the innovation funnel has a crucial role to play (Paina, 2017). It enables the concerned organisations to determine better and structured ways of implementing the theory. There are five stages in the innovation funnel, as shown in Figure 1. Randhawa & Wilden (2016) states to use the innovation funnel to the best of its capabilities, firms should encourage and develop a wide variety of ideas so that the funnel can be used to the best of its capabilities. By using the funnel, companies can develop and encourage different ideas that then help in making many small changes in the existing product line up. In order to use the innovation funnel, firms should be ready to accept a large number of ideas from a variety of sources (Lee & Hallak, 2016). The more diverse such ideas are, the better it will be for the company and will make the overall innovation process a lot simpler and effective.

Another significant aspect regarding the application of incremental innovation theory is regarding discovering opportunities. This entails that firms should spend a considerable amount of time in communicating with different sources and in performing a thorough analysis of the market and the general environment to identify the relevant opportunities (Afzal & Shamim, 2015). This way firms can not only learn about and identify opportunities for making relevant changes in the existing products, but the firms can make future plans as well that could help in enhancing its overall performance and long-term sustainability as well.

Benefits and Limitations of the Incremental Innovation Theory

The theory of incremental innovation is one of the most popular and commonly used theories of innovation. There are several examples where businesses have used this theory and have gained significant success and popularity in the market (Howaldt & Domanski, 2016). There are several benefits and limitations of this theory. One of the key benefits of the theory is that it enables the management to diversify its product portfolio. Since such innovation entails making small changes and innovations in the existing line of products, companies thus are required to make small investments into research & development and innovation-related activities (Vargo, 2015). This way, firms have the opportunity to increase and diversify their product portfolio. By doing so, they can enhance their overall performance as well, and thereby improve their sustainability in the market.

In this age of hyper-competition, 'staying relevant' in the market is becoming increasingly difficult. Although there are several means and methods through which firms can remain relevant and perform actively, using incremental innovation makes this process a lot simpler and easier to perform (Andersen & Markard, 2017). Products of even some of the biggest companies get updated regularly. Such companies achieve this target by using the incremental innovation theory.

Another key objective for firms is to retain their customers. As the competition across verticals is increasing at a very rapid rate, customer retention has not only become a key objective but has also emerged as a way that enables companies to perform better and gain a better and more influential position in the market (Köhler, 2019). Using incremental innovation enables businesses to collect detailed information about the needs and demands of the customers. With such information companies make relevant changes in their product line-up to fulfil demands of the customers and keep them satisfied. Incremental innovation further enables businesses to retain their market share as well (Bailey & Kleinhans, 2018). Thus, it can be said that by using incremental innovation, businesses can remain in front of the competition as well as the buyers while taking small risks.

Retaining customers also enhances the sustainability of the company. High customer retention rate indicates a higher degree of performance from the firm, which then helps in enhancing its sustainability. According to Mattes & Huber (2015), while radical innovation plays a crucial role in a firms’ long-term strategy, incremental innovations keeps customers interested in the organisation. It continually reminds the customers about the company and thereby helps in pro-longing product and/or services’ market life.

However, there are certain limitations to using this theory of innovation as well. One of the bigger disadvantages is that it is a time-consuming process since companies have to spend considerable time in innovating and moreover, its results are obtained at a very later stage (Sørensen & Torfing, 2017). In order to implement incremental innovation, organisations need to make small change or innovations from time to time. This can be a long-term and time-consuming process. Due to this reason, there are chances that it might take considerable time for the company to achieve success and the desired results. It can thus have a negative influence on the firm and its performance as well.

Another limitation of such innovation is that it requires a lot of planning. For undertaking such innovation, firms need to develop sound and extremely detailed plans (Domanski & Kaletka, 2017). This, in some cases, tends to limit the application of the incremental innovation theory and makes it less useful for companies. Sometimes, firms are unable to develop detailed plans due to several reasons like resources or small scale of operations; and thus, they are unable to reach the desired goals. In this regard, it can be said that in the current age of hyper-competition, the use of the incremental innovation theory is limited to be used by large multinational organisations (Slayton & Spinardi, 2016). Small scale organisations should not use it because they require a significant sum of planning and resources.

The fact that this theory and the resultant innovation is highly specialised, it can be implemented, carried out and executed only by experienced and qualified individuals. It can be said that the incremental innovation theory needs to be executed only by ‘qualified personnel’. If firms do not have access to such individuals, then they cannot use this theory to the desired effects (Kern & Rogge, 2018). Due to this reason, the incremental innovation theory has minimal application and needs to be used with utmost care. Any mistake can be dangerous for the firm and could adversely influence its overall performance as well.

APPLICATION OF THE INCREMENTAL INNOVATION THEORY IN THE HISTORICAL DEVELOPMENT CONTEXT

Company Background

Dyson Ltd is a UK based technology company which was founded by Sir James Dyson in 1991. The company designs and produces household appliances like air purifiers, hairdryers, vacuum cleaners, bladeless fans and many more (Howaldt & Kopp, 2015). Dyson is considered a market leader in this segment. Although aspects such as quality of products are one of the several reasons for the profound success of the company, however, its success can be attributed to the use of incremental innovation in improving the existing products. Today the company operates in almost all major markets in the world. It also invests significantly in research & development (Bolton & Hannon, 2016). By doing so, Dyson aims at making small and relevant changes to its products and thereby improve the functioning of its products to provide more value to the customers and thus fulfil their varied needs and demands.

Historical Development

Sir Dyson’s innovative thinking and designing made him popular, due to which he was able to establish the company. One of the keys to the company's such a strong position in the market is the small and incremental changes or innovations to its products (Hazarika & Zhang, 2019). In 1978, Dyson designed and developed an industrial cyclone tower which removed dust and powder particles using the centrifugal force. This was a very innovative idea, which became a key idea for him when later he designed and developed the existing vacuum cleaners from companies such as Hoover. The first prototype of the vacuum cleaner that he developed was able to suck the dust into a cone that was located in the middle of the machine and then spin it outwards towards the edges using centrifugal forces (Vincent, 2017). The canisters at the edges which collected the dust could be removed and cleaned easily. This was a significant innovation for the industry because it then removed the need for vacuum cleaner bags, which was the product through which companies like Hoover made their money and were able to perform well (Neate, 2019).

Sir Dyson had studied and trained at Art College, which meant that majority of his innovations were made from a designing viewpoint (Randhawa & Wilden, 2016). In this regard, first, he used to suggest and design a radical change, and during later stages, he focused on making small and incremental innovations to enhance the existing products and their overall performance. Many experts believe that he used radical innovation theory, but in essence, he used a combination of radical and incremental innovation (Howaldt & Kopp, 2015). However, radical innovation was used only till the designing stage. Dyson relied heavily on the process of discovery and experimentation, as these formed the basis for idea generation and enabling him to design and develop better products that added significant value for the customers and then helped in satisfying their varied needs and demands. Following this process helped in creating a strong brand image among the customers, who liked the company because of its well developed and high-quality products, whilst also becoming a disruptor in the market (Nambisan & Lyytinen, 2017).

For Dyson, prototyping was the key. This was an essential part of the reason for the company's profound success and for him as a designer, developer and innovator. He took nearly 15 years and more than 5000 prototypes before he was able to create the vacuum cleaner that not only worked perfectly but also made Dyson a household name as well (Huggins & Thompson, 2015). This design philosophy is still used in the company, as the engineers at the company are required to make models from card and foam which are used for determining needs of the product and deciding where to put all the components (Bolton & Hannon, 2016). Since the prototypes fail more often, this allows the engineers to design and develop better product ideas every time, which then helps the company in enhancing its overall performance as well.

Business Canvas Model of Dyson

APPLICATION OF THE INCREMENTAL INNOVATION THEORY IN THE FUTURE DEVELOPMENT CONTEXT

Future Development

Dyson is investing in artificial intelligence and robotics to improve its existing products and to provide better value to the customers. This is also a part of the radical and incremental innovation process for the company, as it is seeking for ways to integrate artificial intelligence (AI) and robotics into vacuum cleaners to make them better and more effective (Vincent, 2017). Although there is not much information available on this topic, as Sir Dyson and the company has kept it as a closely guarded secret, but it is a known fact that the company has taken initiatives to develop a new UK campus which will double its workforce reaching to figures of 7000 in the next five years. In addition to this, the company has also invested close to £3oo million in developing a new research facility in Singapore (Vincent, 2017). By investing into robotics, AI and machine learning, the company is aiming to make the vacuum cleaners intelligent and self-sufficient in terms that it will be able to decide and manipulate so it can clean better and thus provide better performance for the customers.

This clearly shows that the company is more interested in making smart products for smart homes and thereby enable the customers to use a well-connected and far efficient and effective ecosystem that provides extensive support to its products This way the firm is aiming to fulfil needs and demands of the customers (Hinings & Gegenhuber, 2018). There are several angles that the company is working on. It includes the likes of AI, robotics and machine learning, along with voice integration. The company believes these technologies are the future of vacuum cleaners and many of its other products (Mattes & Huber, 2015). Here Dyson is also looking for ways in which it can improve the existing technology so that it better suits the requirements of the customers, but also makes its products future-ready.

Apart from this, Dyson, because Britain is no longer a part of the European Union (EU), is also looking to move out of the country. In this regard, the company has moved its headquarters from rural England to Singapore (Neate, 2019). Even though the company is claiming it as a move that 'future proofs' its operations, it is inevitable that the management is interested in ensuring that the company’s performance does not suffer from the decision made by UK government and the citizens to leave the EU. Through this decision, the company is also aiming to target the Asian market, which accounted for one-third of its revenue come from this region (Köhler, 2019). In addition to this, it can further be said that the company is looking for ways to benefit from a lower cost of labour and operations in the Asian countries than that in the UK, and also gain access to latest technologies. Countries such as China and Singapore are technologically advanced. They not only provide a strong entrance to the Asian market but also provide companies with cheap labour as well as access to the latest technologies (Neate, 2019).

The company has also invested £200 million in the UK, as it plans to expand the Wiltshire facility to boost testing for electric cars (Partington, 2018). This is a slowly growing market, and also the future of cars and other types of vehicles. Therefore, to remain relevant and also gain a strong presence in the international market, Dyson is looking to develop its electric car and thus try to attract the young audience. However, the company is setting up its manufacturing facility in Singapore, with 2021 launch plans (Jolly, 2018).

CONCLUSION

In this report innovation journey of Dyson, which is a UK based technology company, has been discussed. The company is renowned for designing and manufacturing household appliances like vacuum cleaners, hand dryers, heaters, bladeless fans, hairdryers, etc. In 1978, Dyson designed and developed an industrial cyclone tower which removed dust and powder particles using the centrifugal force. As compared to radical or disruptive innovation, incremental innovation does not entail making significant changes or improvements, and therefore it does not have a very significant impact on the market and its dynamics. In the application and use of incremental innovation, the innovation funnel has a crucial role to play. It enables the concerned organisations to determine better and structured ways of implementing the theory. Since companies have to spend considerable time in innovating and its results are obtained at a very later stage. In order to implement incremental innovation, organisations need to make small change or innovations from time to time. Sometimes, firms are unable to develop detailed plans due to several reasons like resources or small scale of operations; and thus, they are unable to reach the desired goals.

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